BSBFIM601 Assessment ` 1 (1)

BSBFIM601 Assessment 1

Identify and describe financial probity requirements for businesses.

Probity decisions should be:

Helpful: Probity should be used to facilitate discussion of current approaches to market with suppliers in order to promote genuine engagement,

Inclusive: Probity processes should be designed to enable innovative approaches to be adopted if required.

Tailored: Probity roles can be tailored to the business need and range from using internal expertise through to engaging external specialist advice.

Sensible: Each individual process may require a different approach; one size will not fit all.

Identify four examples of what would be consider fraudulent behaviour in regard to company finances.

Know Your Employees: Fraud perpetrators often display behavioral traits that can indicate the intention to commit fraud. Observing and listening to employees can help you identify potential fraud risk. It is important for management to be involved with their employees and take time to get to know them. Often, an attitude change can clue you in to a risk. This can also reveal internal issues that need to be addressed.

Make Employees Aware/Set Up Reporting System: Awareness affects all employees. Everyone within the organization should be aware of the fraud risk policy including types of fraud and the consequences associated with them. Those who are planning to commit fraud will know that management is watching and will hopefully be deterred by this.

Implement Internal Controls: Internal controls are the plans and/or programs implemented to safeguard your company’s assets, ensure the integrity of its accounting records, and deter and detect fraud and theft. Segregation of duties is an important component of internal control that can reduce the risk of fraud from occurring.

Identify the requirements for audited accounts and the purpose of an audit report.

An audit report is a written opinion of an auditor regarding an entity’s financial statements. The report is written in a standard format, as mandated by generally accepted auditing standards (GAAS). GAAS requires or allows certain variations in the report, depending upon the circumstances of the audit work in which the auditor engages. The following report variations may be used:

A clean opinion, if the financial statements are a fair representation of an entity’s financial position.

A qualified opinion, if there were any scope limitations that were imposed upon the auditor’s work.

An adverse opinion, if the financial statements were materially misstated.

A disclaimer of opinion, which can be triggered by several situations. For example, the auditor may not be independent, or there is a going concern issue with the auditee.

Describe the principle of cash accounting one advantage and one disadvantage of cash accounting.

Cash accounting is an accounting method where receipts are recorded during the period they are received, and expenses are recorded in the period in which they are actually paid. Cash accounting is one of the two forms of accounting. The other is accrual accounting, where revenue and expenses are recorded when they are incurred. Small businesses often use cash accounting because it is simpler and more straightforward, and it provides a clear picture of how much money the business actually has on hand. Corporations, however, are required to use accrual accounting under generally accepted accounting principles.

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ich they are actually paid. Cash accounting is one of the two forms of accounting. The other is accrual accounting, where revenue and expenses are recorded when they are incurred. Small businesses often use cash accounting because it is simpler and more straightforward, and it provides a clear picture of how much money the business actually has on hand. Corporations, however, are required to use accrual accounting under generally accepted accounting principles.

Describe the principle of accrual accounting and one advantage and one disadvantage of accrual accounting.

The accrual principle is the concept that you should record accounting transactions in the period in which they actually occur, rather than the period in which the cash flows related to them occur. The accrual principle is a fundamental requirement of all accounting frameworks, such as Generally Accepted Accounting Principles and International Financial Reporting Standards.

Explain the four main taxation and superannuation obligations for a business. Briefly discuss each obligation.

– Australian business number (ABN): Consider getting an ABN for your business. An ABN helps to manage your tax and business obligations, and is used as a reference by the Australian Taxation Office (ATO) for your business. You will also use your ABN when dealing with other businesses and government departments.

– Goods and services tax (GST): GST is a broad-based tax of 10% imposed on most goods, services and other items sold in Australia. Depending on your turnover or service, you may need to register for GST.

– Pay as you go (PAYG): PAYG is a system that allows you to pay an expected tax liability in instalments. The ATO will notify you of your PAYG obligations.

– Tax obligations for paying staff: As an employer, you must be aware of your tax obligations when paying staff, including pay as you go, withholding tax and superannuation. Depending on the size of your business, you may also need to pay payroll tax.

Identify the Act that details requirements for financial reporting and auditing and, explain the requirements for companies for preparing and lodging financial reports under this Act.

Corporations Act 2001

The information on these pages is intended to help users of financial reports, including shareholders, investors and creditors, better understand:

the circumstances in which a financial report is required and the information a report must contain

the differences between various types of financial reports

which entities must have their financial reports audited,

the purpose of an audit report and the difference between audits and reviews, and

the answers to other general financial reporting and audit questions.

Explain the requirements for registered foreign companies regarding preparing and lodging financial reports.

It is an independent opinion provided by an independent external auditor as a result of an audit, review or agreed procedures conducted on an entity.The auditor’s report is intended to provide an opinion to report users as to whether the applicable financial reporting framework has been applied in…

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